By Hugh Walsh, Partner of Walshs
The steps you take in establishing or running a medical practice play a major role in how successful it is in the future.
Get it right and you can focus on medicine. Get it wrong and you risk facing a never-ending stream of problems that, at best, will distract you from your important work and, at worst, could cost you a lot of money today and tomorrow.
There are five key areas you must focus on when first establishing a practice, but it is equally important that established practices continue to look at how they are operating and consider if anything needs improving. It’s truly not a set and forget exercise, it’s something, like all manners of business, need regular reviewing.
The structure you operate from can make a big difference to your future wealth and financial security.
Each structure type has its own benefits and limitations, but it is important to choose one that meets your individual circumstances and is in accordance with ATO guidelines, while at the same time yielding any additional tax benefits.
So you need to ask yourself if that is the case.
Does your structure comply with ATO guidelines and meet payroll tax, superannuation, WorkCover and employee leave entitlement obligations?
Does it provide opportunities for tax planning and adequate asset protection?
It is also important you have the appropriate documentation in place for your structure as well as agreements with your business partners.
No one plans to have a dispute with their partners, but having the right structure and safeguards will help ensure everyone is correctly informed if one does arise.
As a medical professional it is likely you will pay your fair share of tax throughout your career.
There are certain tax planning strategies that can be implemented to effectively manage tax liabilities, while still ensuring you are compliant with ATO guidelines.
You need to look at whether you are taking advantage of the unique tax planning opportunities available to medical professionals.
It’s also important to meet with your accountant at least once a year to discuss tax planning strategies.
Is your debt structured correctly to ensure you maximise the tax deductibility of interest and do you have a structured plan for superannuation and contributions?
Technology and software
There is an abundance of technology and software available to medical professionals to help streamline your processes and reduce costs.
The hardest part might be disseminating it all and working out what is most suitable for your practice.
For a start, it is important to use cloud-based accounting software and be aware of the various plug-ins available to your accounting software to automate and streamline processes.
Ask yourself if you are getting the most out of your software and if you have been provided with adequate training.
If not, it’s important you do so.
Are your processes automated through technology to improve efficiency and reduce costs?
Make sure you ask your accountants if they are familiar with the software available to medical professionals and if they have strong relationships with the providers.
The power of collaboration
The life of a medical professional can be stressful, with competing demands on time.
A topic that invariably arises when meeting with our clients is that there are not enough hours in the day to achieve the many tasks on the to do list.
To that end, synergies gained from having everything “under the one-roof” should never be overlooked.
It is important that your practice’s bookkeeping, accounting and taxation are all done by the one team, in order to streamline the process and reduce costs.
You need to speak with your adviser about lending, investments and insurance as well as considering how much time you spend working on your business to understand how to identify efficiencies in operation, implement process improvement ideas and best practice solutions.
The medical profession is unique and therefore to get the best advice you need to make sure you have the right people on your extended team.
Industry understanding, technical knowledge and proven results are critical attributes you should look for when selecting your team.
It is important your accountant has a great network of firms around them to support you in the successful operation of your practice and makes you fully aware of all the financial opportunities available to you.
If you want further insights on how to elevate your medical practice and maximise success, contact Hugh Walsh of Walshs on 07 32215677 or email firstname.lastname@example.org